Latest US jobs data is good news for the economy but bad news for the crypto market
Bitcoin fell to a low of $21,164 on the Bitstamp exchange Friday on strong US jobs data.
The US economy added 372,000 jobs in June, much better than analysts’ forecast of 250,000, according to data published earlier today by the Bureau of Labor Statistics.
The extraordinarily strong labor market showed that fears of a US recession were high.
While this is good news for the US economy, risk assets including cryptocurrencies have declined significantly as bullish jobs data could prompt the US Federal Reserve to hike rates at a much faster pace.
Fed-dated swaps are now pricing in July with a 97% chance of another 75 basis point increase.The world’s most powerful central bank is attempting to do a “soft landing,” which means slashing inflation with high interest rates without causing a severe recession.
In mid-June, the Fed announced an increase of 75 basis points for the first time since 1994, U.Today reported.
Earlier this week, Fed Governor Christopher Waller said he would support a hike of another 50 basis points in September.
The aggressive monetary policy of the Fed is believed to be the main reason behind bitcoin’s brutal price performance in 2022. The largest cryptocurrency recently recorded its worst quarter in more than a decade. This is in stark contrast to the bull market of 2021, during which the top cryptocurrency marked new record highs due to the Fed’s ultra-easy monetary policy.
As reported by U.Today, Galaxy Digital CEO Mike Novogratz recently said that Bitcoin could go lower before the Fed finally “flinches” it.